Delta Preps For Possible Chapter 11 Filing
Delta Air Lines confirmed it has retained private investment firm Blackstone Group and New York law firm Davis, Polk, and Wardwell to handle debt restructuring and a possible bankruptcy filing. In light of those developments, analyst Helane Becker of The Benchmark Co., in a research note late last month, said, "We are moving up our bankruptcy chances for Delta Air Lines to 50 percent from 20 percent." J.P. Morgan Securities analyst Jamie Baker said timing for a potential Delta bankruptcy now is near year-end. Citing fuel concerns, the poor revenue environment and seasonal first-quarter weakness, he said, "We no longer believe Delta enjoys the relative luxury of a mid-2005 decision. Delta may inch every bit as close to the abyss as did AMR Corp."
US Airways Details Network Plans
In an employee update issued late last month, struggling US Airways laid out plans for its network with an aim "to recapture the number-one marketshare position" on the East Coast. Diffusing speculation of a possible sale, the carrier said the US Airways Shuttle will be "the centerpiece" of increased point-to-point flying from Boston, New York LaGuardia and Washington National. Philadelphia is to remain at the "core of the network," while Pittsburgh operations are downsized from a hub to a focus city. "Smaller markets that have little demand to and from Pittsburgh likely will lose service," US Airways said. Charlotte, which will remain a traditional hub operation, will see increased domestic and international service.
Hotel Amenity Creep Continues
With improved bedding and high-speed Internet access at the top of the list of amenities business travelers say they want in a hotel room, chains are rushing to offer the enhancements as a way of keeping up with the competition. Carlson Hotels Worldwide last week announced its Radisson brand will be the latest to roll out a signature bed, while Hyatt Hotels Corp. said it will introduce wireless Internet capability in public spaces and in a limited number of guest rooms at its U.S. hotels by early 2005.